Industry sources said such growth could help reinvigorate China's copper imports and thus support international copper prices.
Copper producers and downstream consumers expect the Chinese authorities to support economic growth in the second half of the year by encouraging infrastructure investments, including the power sector, rather than relying on stimulus measures. The power industry accounts for about half of China's copper consumption.
Yang Changhua, chief copper analyst at Antaike, said that refined copper consumption in the first half of the year increased 5.9% to 3.92 million tons from the same period of the previous year, and may increase to 4.18 million tons in the second half.
This means that copper consumption will increase by 5% in the second half of the year and by 6.6% from the first half.
He said that once there is signs of government support, forgings using refined copper as raw materials will start to increase inventories. He also said that in the past six months, stocks have been intentionally maintained at low levels.
A manufacturing plant purchasing manager said that many forgings now have a higher intention to increase copper inventories than in the first half. The manufacturer uses copper bars to produce electronic products.
“The demand for copper in the second half of the year is likely to be better than many people expected. There is not much copper in the market, and inventory has been decreasing in the past few months,†the manager said. He asked for anonymity because he was not authorized to publish to the media.
Industry sources said that the decline in domestic inventories and the shortage of scrap copper in the past quarter meant that an increase in domestic demand would push up imports. 30% of the raw materials produced in China's copper are derived from scrap copper.
The manufacturing plant manager said that the forgings had increased the purchase of refined copper to replace scrap copper in the second quarter. The shortage of scrap copper will further increase the demand for refined copper in the second half of the year.
Three senior metal producers said that the shortage of scrap copper means that China's refined copper output this year may not exceed 5.6 million tons in 2012.
One of the top executives said that monthly imports in August, September and October should be strong, as the peak season of consumption starts from September to November.
In the first five months of 2013, China's refined copper imports fell to 1.09 million tons, down 33% from the same period last year. The June data will be released next week.
Traders said that copper inventories in Shanghai bonded warehouses fell from about 1 million tons at the end of January to around 400,000 tons. Stocks monitored by the Shanghai Futures Exchange fell to 168,760 tons last week, a one-third less than the year-end high at the end of March.
China's refined copper consumption will continue to grow in the second half of the year
Abstract China's refined copper consumption may increase in the second half of the year after growth of more than 5% in the first half of 2013. It is expected that the Chinese government will support the power industry to boost economic growth and boost copper consumption. Industry sources say such growth may help revitalize
China's refined copper consumption may increase in the second half of the year after growth of more than 5% in the first half of 2013, as the Chinese government is expected to support the power industry to boost economic growth and boost copper consumption.